Articles Posted in Wage and Hour Disputes

The “daily commute” is an iconic element of routine life in the U.S. In 2013, about three-fourths of American workers drove to work by themselves. Average commute time in New Jersey was 28.6 minutes in 2000. That number grew to 30.9 minutes in 2013. Assuming a fifty-week work year, New Jersey workers therefore spent an average of 128 hours and 45 minutes in morning traffic. The number has probably only increased since then, and this does not include time spent getting home at the end of the day. This data raises an interesting question about when a commute constitutes “work” in a legal sense, meaning time for which an employer must compensate a commuting employee. The short answer is that commuting time is usually not “work” in this sense, but the longer answer offers some exceptions to that general rule.

New Jersey law does not address the question of whether commuting time is compensable, so we must look to federal law. The Fair Labor Standards Act (FLSA) of 1938, 29 U.S.C. § 201 et seq., establishes a national minimum wage and rules for overtime compensation. It does not provide a specific definition of “work.” Congress enacted the Portal-to-Portal Pay Act (PPPA), 29 U.S.C. § 251 et seq., in 1947 to address “potential retroactive liability [that] may be imposed upon employers” under the FLSA. Id. at § 251(a). Section 4 of this law exempts employers from liability under the FLSA for failing to pay the minimum wage to an employee for “walking, riding, or traveling to and from the actual place of” employment. Id. at § 254(a)(1).

The U.S. Department of Labor (DOL) has issued regulations based on § 4 of the PPPA. Commuting from home to work is not compensable time under the FLSA in an “ordinary situation,” meaning when such travel is “a normal incident of employment.” 29 C.F.R. § 785.35. This applies, according to the DOL, regardless of whether a worker has a fixed place of employment or works for an employer at multiple locations.
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In May 2016, the U.S. Department of Labor (DOL) issued a new rule that reportedly would have extended overtime pay for millions of workers around the country. Twenty-one U.S. states, led by Nevada, filed suit against the DOL in September to challenge the rule, alleging that it violated provisions of the Fair Labor Standards Act (FLSA), the Administrative Procedures Act (APA), and the U.S. Constitution. State of Nevada et al. v. U.S. Dep’t of Labor et al., No. 4:16-cv-00731, complaint (E.D. Tex., Sep. 20, 2016). A federal judge granted an injunction against the rule in November, temporarily halting its implementation nationwide. An appeal is still pending in the Fifth Circuit as of late January, but a new administration has also moved into the White House. It is not at all clear whether the DOL will continue to pursue the appeal or even defend the rule in the remainder of the trial court proceedings.

The FLSA establishes a national minimum wage and requires employers to pay nonexempt workers overtime pay at a rate of one-and-a-half times their regular rate of pay. Certain employees are exempt from the FLSA’s overtime provisions, including workers in executive, administrative, and professional positions. The DOL refers to these as EAP exemptions or white-collar exemptions. See 29 U.S.C. § 213(a)(1), 29 C.F.R. Part 541. The exemptions apply to employees who work in these fields and earn income above a certain threshold.

The new rule would raise the threshold from the current $455 per week for a full-time employee to $913 per week, or from $23,660 to $47,476 per year. 81 Fed. Reg. 32391, 32393 (May 23, 2016). The DOL estimated that this would affect about 4.2 million people nationwide. The rule was scheduled to take effect on December 1, 2016, but a lawsuit and an injunction changed that.

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The Fair Labor Standards Act (FLSA), along with state laws like the New Jersey Wage and Hour Law (WHL), requires employers to pay overtime compensation to non-exempt employees after they have worked more than 40 hours in a week. 29 U.S.C. § 207(a), N.J. Rev. Stat. § 34:11-56a4. Overtime pay violations can deprive workers of substantial amounts of wages, but while these amounts are significant to these workers, they are often not enough to make individual legal actions worth the cost. State and federal laws allow people with relatively small claims to file a lawsuit as a class action on behalf of the massive number of similarly situated claimants, and the FLSA has a procedure for “collective actions.” A federal judge in New Jersey recently granted certification to a FLSA collective action, as well as several state-law class actions, in a suit for unpaid overtime. Rivet, et al. v. Office Depot, Inc., No. 2:12-cv-02992, opinion (D.N.J., Sep. 13, 2016).

In order to obtain certification as a class action under federal law, plaintiffs must establish four elements:  numerosity of class members, commonality of legal or factual questions, representativeness of the plaintiffs’ claims, and ability of the plaintiffs to “fairly and adequately” represent the class. Fed. R. Civ. P. 23(a). The FLSA does not establish as many specific elements for a collective action, simply stating that the claimants must be “similarly situated.” 29 U.S.C. § 216(b).

The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, has identified examples of facts and circumstances that can establish or refute that claimants are “similarly situated.” Claimants who work “in the same corporate department, division, and location,” who “advance similar claims” and “seek substantially the same form of relief,” and who “have similar salaries and circumstances of employment” could be considered “similarly situated” for the purposes of an FLSA collective action. Rivet, op. at 4, quoting Zavala v. Wal-Mart Stores, Inc., 691 F.3d 527, 536-37 (3d Cir. 2011).

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Employers that are subject to the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., are obligated to pay their non-exempt employees minimum wage and overtime. The FLSA allows plaintiffs alleging wage and hour violations to file a lawsuit on behalf of all similarly situated employees and former employees, known as a “collective action.” This is similar to a class action under Rule 23 of the Federal Rules of Civil Procedure, but it differs in several important ways. A federal court granted conditional certification last year to a collective action filed against a national restaurant chain. Turner v. Chipotle Mexican Grill, Inc., No. 1:14-cv-02612, mem. order (D. Col., Aug. 21, 2015). By the end of the summer of 2016, more than 10,000 of the defendant’s employees had reportedly joined the lawsuit.

The FLSA requires employers to pay minimum wage, which is currently $7.25 per hour at the federal level. Many states, including New Jersey, have a higher minimum wage, but $7.25 per hour is the amount that workers can enforce under this particular statute. Overtime work, basically defined as work performed over 40 hours in a calendar week, is entitled to 1.5 times the employee’s usual rate of pay. For a worker earning minimum wage, this would be $10.88 per hour. A common FLSA wage and hour violation involves requiring employees to perform duties at times when they are not “on the clock.” This might include time spent changing into and out of uniforms or work clothes and performing other tasks before or after the employer requires employees to clock in or out.

Individual wage and hour claims might not seem particularly significant at first glance, in the sense that an employee might be losing a fraction of an hour’s worth of pay for one shift. These sorts of practices often recur on a daily basis, however, over long periods of time, and the numbers can add up very quickly and become a very significant amount for an individual worker. It still might not be enough to make an individual legal claim worth the cost of both time and money. This is where FLSA collective actions help workers in this sort of situation.

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The Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., guarantees overtime pay for employees of covered employers for work performed in excess of 40 hours in a week, provided that they do not fall under one of the law’s exemptions. Regulations promulgated by the U.S. Department of Labor (DOL) set a minimum salary level, above which some employees are exempt from the overtime rule. The DOL issued a new regulation in May 2016 raising this level, giving more than four million workers nationwide access to overtime pay. 81 Fed. Reg. 32391 (May 23, 2016). The new rule will go into effect on December 1, 2016.

Workers are entitled to one and a half times their regular pay under the FLSA if they work over 40 hours in a week. 29 U.S.C. § 207(a). Employees who work “in a bona fide executive, administrative, or professional capacity,” however, are exempt from the FLSA’s overtime rules. Id. at § 213(a)(1). This applies to a wide range of workers, and the DOL’s regulations go into great detail about how the overtime exemption applies to executive, administrative, professional, computer, and outside sales employees. See 29 C.F.R. § 541.0 et seq.

Current DOL regulations only exempt executive, administrative, and professional employees from the overtime rules if their salary is at least $455 per week, also calculated as $910 biweekly, $985.83 semimonthly, or $1,971.66 per month. 29 C.F.R. § 541.600. Annually, this equals a salary of just under $23,660. The DOL set these levels in 2004, and that was reportedly its first revision of the salary levels since 1975. 69 Fed. Reg. 22122 (Apr. 23, 2004). The new rule is partly a response to concerns that the cost of living has exceeded the 2004 level.

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